One of the many perks of homeowners is big tax breaks. So whether you’re doing your taxes yourself or getting help from a professional, it’s important to take advantage of those tax breaks! With tax season in full swing, here are a few things to consider as your prepare your paperwork.
Mortgage Interest Deduction: Before buying a home, a standard deduction may have made the most sense when you prepared your taxes. But homeowners can deduct the interest portion of their mortgage payments, and the earlier you are in your mortgage, the greater the percentage of each payment that goes toward interest, so take advantage right away! Each year, homeowners with mortgages will receive a 1098 from each mortgage lender, which outlines the mortgage interest paid during the year. Hold onto that document, as you will need it when it is time to do the tax filing.
Home Office: There are specific criteria that have to be met in order to deduct home office expenses, but it can lead to a very large deduction. In general, your home office has to be used specifically for business purposes. Check with a tax professional to see if your home office qualifies for a deduction—it’s a little extra work, but can make a big difference in your tax responsibility.
Looking to become homeowner for the first time? Contact the agents at Broadpoint Properties and we can help you to navigate the home-buying process.